Chinese hospitals pay search engines millions of yuan each year to bring in patients

High stakes internet marketing techniques stir ethics and quality debate in the business models of private hospitals

Terms like “SEO”, “PPC”, “search engine marketing”, and “paid listings” have always been associated with corporations and businesspeople. Hospitals would probably never even come to mind, which was why it was surprising to find out that hospitals in China have been more involved with paid listing and keyword bidding than most expected.

The practice was commonplace among medical professionals and establishments, and many private hospitals have been doing it for quite a long time. The method works by driving traffic to the hospitals through ranking high in search result pages, which then would be translated to chats between patient and doctors. Eventually many of these leads will end in official consultation and treatment sessions.

The cost and effectiveness of search engine marketing for medical queries

According to investigations by a reporter from the Beijing News, every patient paid about 6000 yuan in medical costs on average in many hospitals under the Beijing Yingcai Hospital Management Co., Ltd. Half of the said costs paid were used on paid listings.

The investigation was further backed by Le Delin (pseudonym), a director in charge of the company’s online affairs, who claimed that it was being done due to its effectiveness. He revealed that, by using a hospital specializing in andrology in Beijing as an example, the “investment in paid listing”, which can easily reach up to 80 million yuan a year, was responsible for bringing about 30% to 40% of the hospital’s earnings.

Another former employee of a medical company in Beijing who was tasked with keyword bidding, provided a list to the reporter which revealed that the hospital had spent 37707.13 yuan in Baidu, 3951.32 yuan in 360, and 3402.63 yuan in Sogou, between November 1 and November 6, 2015. The investment in all three search engines accounted for 83.68%, 8.77% and 7.55% of the total sum of 45061.08 yuan respectively. 132 chats and 88 effective chats were acquired, with every chat costing 341.37 yuan and every effective chat costing 512.06 yuan.

This cost incurred can varied greatly from one hospital to another, as seen in another list from another hospital specializing in andrology in Shanghai. The list indicated that the hospital had spent a total of 408759.72 yuan throughout November 2014. The investment brought in 91 patients for the hospital, with every patient cost 4491.87 yuan.

Liu Dechang (pseudonym), a staff tasked with keyword bidding in the Chengdu Tianda Sterility Hospital, explained in detail of the finer workings of paid listing and keyword bidding. He stated that a saturated Baidu account can have up to 100 marketing plans, 100 thousand marketing units and 500 million keywords.

He further added that most keywords being bid on were based terms related to factors such as hospitals, treatments, symptoms, and costs. The price of every word was based on ‘quality’ and amount of clicks generated, and as such can vary greatly. Examples of some of the most expensive search keywords would go along the lines of “Beijing’s best andrology hospital”, “cost of treating premature ejaculation”, “how to treat genital warts”. Ultimate pricing of these words depend on factors such as locality, time and your rivals’ bid.

With so much at stake riding on mere computer mouse clicks, management of these departments were understandably careful. Liu Dechang said that it took him almost a month before his company trusted him enough to allow him to get where he was now–managing three Baidu accounts, three 360 accounts, and three Shenma accounts, which accounted for more than 40 to 50 thousand yuan being spent every day.

A warning was also pasted on the wall of the Beijing Jianguo Hospital’s office, explicitly forbidding employees from “clicking the hospital or other hospital’s paid ads, and those who violate the rule can be fined up to 900 yuan”. This indicated the high PPC (pay per-click) cost involved, which went up to several hundreds of yuanperclick at times.

The casualties of the hospital internet marketing war

Despite the method’s effectiveness, Li Delin stated that the situation needed to change. Hospitals which invested heavily in paid listing, such as Beijing Jianguo, Shuguang, Tongji and Changhong, have taken almost all top rankings in search result pages and remained “reputable” as a result. However, the resulting costs of PPC ads were nonetheless borne by the patients, thus driving medical costs ridiculously high, which was often almost twice of what was required in the actual treatments. This would, in the long run, lower credibility and ruin the respective hospitals’ public opinion.

It is important to note that PPC ads and search engine marketing is quite prevalent in the private hospital industry in the US. However, Google (currently blocked in China) SEO differs greatly from that of Baidu, which is typically more ad focussed when it comes to rankings. Google keyword rankings relating to specific treatments to illnesses are typically information sites like Wikipedia (also blocked in China) or Webmd, not private healthcare businesses.